A right-leaning columnist for The Advocate, Jeff Sadow, thinks state government is bloated and that the goal of the upcoming tax reform debate should be to cut taxes. He’s also no fan of the Earned Income Tax Credit, which encourages people to work hard by boosting incomes for low-income workers with children. LBP Director Jan Moller fired back in a letter to the editor:
Louisiana’s insufficient tax structure is the reason state government no longer funds our top priorities. College students returning for the spring semester will face a TOPS program that is only 42 percent funded, meaning students have to pay 58 percent of the bill. Louisiana leads the country in cuts to higher education. Funding for public K-12 schools has been frozen for years, and the number of poor families receiving child care assistance has plunged by 60 percent since 2008. More than 30,000 state jobs have been eliminated since 2008. That’s not bloat. That’s bare-bones. … The problem with Louisiana’s EITC is that it isn’t strong enough. Our credit is 3.5 percent of the federal EITC, making it the smallest credit in the country among the 26 states that have enacted such credits. Sadow is right that Louisiana’s tax structure needs reform. The current structure is inefficient and outdated, and doesn’t generate enough revenue to make the investments needed to move our state forward. But the fix he proposes — doubling down on the Bobby Jindal-style tax cuts that created our fiscal problems in the first place — is the wrong solution.
Governor, business want criminal justice reform
Louisiana business leaders will gather this week to discuss steps the state can take to reduce the state’s massive prison population. Criminal justice reform is already a priority for Gov. John Bel Edwards, and a task force is drafting recommendations for the Legislature. Stephanie Riegel writes for the Greater Baton Rouge Business Report on the importance of the issue:
We’re locking up two and three times as many nonviolent offenders as are fellow Southern states like South Carolina and Florida. But our crime rates are equal to theirs—or higher. In other words, there is a fundamental disconnect between how our cash-strapped state is spending its limited resources in the criminal justice arena and the results we’re getting for it. We’re wasting money and lives by locking up people who don’t really need to be behind bars, then failing to give them the mental health treatment, basic life skills training or job counseling they need to be productive members of society. Meanwhile, truly dangerous offenders are periodically released from prison because we don’t have enough space to keep them incarcerated.
Riegel highlights the importance of the business community stepping up to pass meaningful reform. An upcoming event this week, sponsored by the Louisiana Association of Business and Industry, aims at generating support for common sense reform measures:
Getting such measures passed, whatever form they ultimately take, won’t be easy. Lawmakers will have a lot on their plate, and they’ll face pressure from special interest groups like sheriffs—who house a lot of state prisoners in their local jails and therefore have a financial incentive to maintain the status quo—and tea party types, who will accuse moderates and Democrats of being soft on crime. It’s important for the business community to become educated on the issue and stand up to political pandering. Data shows that criminal justice reform works. There’s no reason Louisiana can’t get this one right. You can find more information on the summit—which will be held from 8 a.m. to noon on Thursday, Nov. 17, at the Crowne Plaza—and register to attend on LABI’s website.
With the state facing more midyear budget cuts and temporary taxes slated to roll off the books in 2018, fiscal uncertainty is causing concern across the state. Business groups are calling for fundamental tax reform that sets the state on a new sustainable revenue path. Gannett’s Greg Hilburn has the story:
(Scott) Martinez (president of the North Louisiana Economic Partnership) also said businesses outside of the state considering investment here want to see permanent tax reform. “There is so much uncertainty about what’s going to happen with credits and exemptions and the temporary sales tax,” he said. “All of that is being noticed by decision makers who need seek more certainty about what they can expect from government here.” State Sen. Francis Thompson, D-Delhi, said he believes the administration should wait until the Legislative Session in the spring to consider instituting mid-year budget cuts as opposed to Dardenne’s plan address the shortfall in the coming months.
TOPS cuts about to hit
Due to the ongoing revenue crisis the state faces, Louisiana families are having to pick up a substantial bill for college. That’s because lawmakers did not raise enough revenue to fully fund the popular merit based scholarship program. Rebekah Allen has the story for The Advocate:
“We constantly hear legislators state how they want to keep their word and they don’t want to break promises to business and industry, but now they’re breaking their promises to these kids,” said Thibodaux resident Kevin George, the father of an LSU freshman. “There are more things that could have been done to fully fund TOPS and a majority of legislators said, ‘No, we’re not going to do that.'” Letters are going out to Louisiana’s TOPS recipients this week from various schools to remind them that they will be on the hook for almost 60 percent of their semester bill.
Immigrants boost economy
While President-elect Donald Trump plans to deport millions of people, new research shows the economic benefits of unauthorized immigrants. Those who come to the country looking for a better life bring a desire to work and contribute. Their contributions add up to a significant boost in GDP for the country. Lydia DePillis has the story for the Houston Chronicle:
A working paper published Monday by economists with the National Bureau of Economic Research estimates that the undocumented population contributes 3 percent to America’s GDP, or $5 trillion over 10 years. Getting rid of a substantial chunk of them could shave as much as a point off the nation’s economic growth — few other policies would have as much impact.
Number of the Day
41.8 – Percentage of a full TOPS award that Louisiana college students will receive in the spring semester. (Source: Louisiana Office of Student Financial Assistance)